Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Second State Legislature

Regular Session of 2004

State of Hawaii

Sir:

Your Committee on Health, to which was referred H.B. No. 2482 entitled:

begs leave to report as follows:

The purpose of this bill is to enable the Hawaii Health Systems Corporation (HHSC) to establish a captive insurance company that may also provide malpractice coverage to the Department of Health (DOH), John A. Burns School of Medicine of the University of Hawaii (UH Medical School), and other state entities.

DOH, UH Medical School, and HHSC testified in support of this measure.

Your Committee finds that HHSC's insurer, as well as other insurers, have discontinued offering malpractice insurance coverage not only in Hawaii, but nationwide. This is a nationwide trend because of the high costs of providing coverage. Your Committee received testimony stating that creating a state captive insurance company, while costly to start-up, will save money in the long-term.

Your Committee respectfully requests the Committee on Consumer Protection and Commerce to discuss the possibility of expanding the state captive insurance company proposed in this measure to other health care providers in the state.

As affirmed by the record of votes of the members of your Committee on Health that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 2482 and recommends that it pass Second Reading and be referred to the Committee on Consumer Protection and Commerce.